This Newsflash discusses the pertinent amendments to the Capital Market Law (Law No. 8 of 1995 on Capital Markets) in accordance with the Financial Sector Omnibus Law.
The Financial Sector Omnibus Law shifts the authority vested to the Capital Market Supervisory Agency (Badan Pengawas Pasar Modal dan Lembaga Keuangan or "Bapepam") under the Capital Market Law to the Financial Services Authority (Otoritas Jasa Keuangan or "OJK"). The Financial Sector Omnibus Law is consistent with Law No. 21 of 2011 on Financial Services Authority and replaces all references to Bapepam to Otoritas Jasa Keuangan/Financial Services Authority.
The Financial Sector Omnibus Law includes certain additional obligations for parties which have obtained licenses, approvals, and effective registration statements issued by OJK. Such obligations include implementing professional standards and compliance with the relevant codes of ethics.1
The Financial Sector Omnibus Law also allows Micro, Small, and Medium Enterprises (MSMEs) to participate in the Capital Market activities by raising public funds through securities crowdfunding service providers.2
Furthermore, the Financial Sector Omnibus Law authorizes OJK as the authoritative body of any criminal investigation in the Capital Market field.3
The Financial Sector Omnibus Law introduces new provisions regarding Carbon Trading, which serves as a mandate for the Indonesian Stock Exchange the (Bursa Efek Indonesia or "BEI") in strengthening the carbon trade. The mechanism will be done through a carbon exchange. Carbon Trading aims at reducing greenhouse gas emissions by trading carbon credits. These credits represent the right for business actors to produce greenhouse gas emissions and carbon footprint. Business actors that have exceeded their carbon credit limit may purchase carbon credits from business actors who emit less carbon footprint through the carbon exchange. This will incentivize business actors to invest in cleaner technologies to produce less greenhouse gas emissions and reduce their carbon footprint.4
Footnotes
1 Article 5A of the Capital Market Law
2 Article 69A of the Capital Market Law
3 Article 101 of the Capital Market Law
4 Article 23 of the Financial Sector Omnibus Law
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
